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 Atomization Continues Unabated  The American car and light truck market is undergoing atomization.  There are 313 car and truck nameplates on sale today in the United States.  By 2022 – just five years in the future – there are going to be 377.  A nameplate is a vehicle name like Ford Explorer, Renge Rover Evoque or Toyota Camry.

Car to Truck Shift Permanent  Manufacturers are adding new products to more tightly appeal to customers with more diverse tastes.  Buyers have shifted to crossover sport utility vehicles (XSUVs) in droves.  Automakers are adding more XSUVs to satisfy every whim.  Trucks began outselling cars in 2001, but since 2012 when cars last had 50% of the market truck sales have boomed.  Today, truck sales are about 61% of the market and AutoPacific forecasts that truck sales will reach 69% of the American light vehicle market by then.  In 2016 there were 178 car nameplates on sale.  Today there are 192.  In 2016, there were 147 truck nameplates on sales; now there are 153.  In 2022, there will be 199 truck nameplates and 178 car nameplates.

Atomization Means Fewer Sales Per Nameplate on Average  In 2016, sales per name were about 54,000 units each on average in a 17 million sales year.  This was up dramatically from the 2009 downturn year when there were 34,500 units sold per nameplate.  But the bad news is that all nameplates are not equal in sales.  Some sell in the thousands while others sell in the hundreds of thousands.

The top ten vehicles, led by the Ford F-Series pickups, accounted for 25% of the sales in 2016.  If you take the top ten sales out, average sales per nameplate in 2016 was 42,000 sales per year.  In 2022 it gets even worse.  AutoPacific is forecasting 16,200,000 sales in 2022, but there are 377 nameplates.  Taking the top ten nameplates out, the remaining 367 nameplates will sell only 32,700 each.  This puts average sales per nameplate in 2022 about the same as the downturn year of 2009.

Auto Marketing Wars to Continue  With so many individual nameplates on the market it will be difficult for auto marketers to support them.  Marketing budgets are not large enough to get this number of new nameplates in the car buyer’s consideration set.  As XSUVs continue to grow in popularity, traditional sedans will be allowed to languish or be dropped altogether.  At best, strong marketing support will be during the vehicle’s launch period and then taper off.  If a vehicle is a hit, it may continue to get TV time, but more and more targeted internet advertising will become the name of the game.  If a vehicle is not a hit, it will quickly become an unloved cash cow.

It’s no surprise that the Chief Marketing Officers at American automotive brands have a target on their back.  Failing to create the magic potion that will keep this huge number of nameplates moving off of dealer lots is hugely challenging.  Creative talent and huge amounts of money are required to continue succeeding in the upcoming more crowded vehicle market.

And… don’t forget the disruptive influence of electric vehicles, autonomous vehicles and the changing driving/vehicle ownership environment of the next ten years.